A change in labor productivity affects __________ and a change in the exchange rate affects __________.
A) SRAS; SRAS
B) AD; AD
C) SRAS; AD
D) AD; SRAS
E) none of the above

Question

Quizplus · Accepted Answer

A change in labor productivity affects the Short-Run Aggregate Supply (SRAS) because it influences the cost of production and output levels. A change in the exchange rate affects Aggregate Demand (AD) as it impacts the relative price of exports and imports, influencing net exports and overall demand.

A Change in Labor Productivity Affects __________ and a Change